Q: My friend and I want to open a join business account. We will be opening it with a DBA but I'm concerned about banking
My credit union says that no institution has the option to restrict withdrawals from a joint account unless both parties sign for the withdrawals. However, a contract I've created gives such an option. How valid is a notarized contract in this case if institutions do not offer mandatory signatures for withdrawals by both parties? What protection options do we have to prohibit wrongful withdrawals from a joint business account?
A: Generally, a contract is only binding on the parties who sign the contract. If the bank is not a party to the contract, it does not have to follow it. You and your business partner can contractually agree to limit the money each of you can withdraw from the account. However, you would not be able to enforce the contract against the bank because the bank is not a party to the contract.
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